3 Ways to Protect Your Investments
Posted by Ocean Wealth
Everyone wants to have a happy and healthy portfolio. Nobody makes investments with the end goal of merely getting by. They want to preserve capital and, ideally, make some money from investments they’ve made over the years.
Several factors can lead to portfolio problems piling up, though. There’s market volatility, potentially leading to later issues during a stock market crash or recession. There’s the fear of not having diverse enough investments for the long-term, creating a stagnant portfolio. And there’s even the issue of being without a financial advisor who can help you decipher different investment strategies.
Of course, portfolio security should always be at the top of your mind when investing. You want the best route to a robust financial future. The sooner you understand that there are certain things you can do to ensure that — the better off you’ll be. But we’re going to do you one better and make it even easier. Here are three ways you can help protect your investments.
It’s the most popular term used in every movie and TV show about the finance world for a reason. Diversification can work wonders for your portfolio. The idea behind this protection method is simple and mostly harkens back to the old adage of not putting all your eggs in one basket.
The most important thing to know about portfolio diversification is that it’s based on balance. You’re not investing all your money into one company or stock. You’re spreading the wealth around so that you can have various investments across different companies and industries.
Think about it this way. An all-meat diet might be good for the short-term, and you might even lose a bit of weight as a result. After a while, however, your body might inherit problems related to that dieting style since you’re not consuming any veggies or fruits. To have long-term success, you need to maintain balanced eating habits — your portfolio craves the same thing.
A lot of people wait for the “perfect time” to invest. They sit on the sidelines until they see an opportunity to make a big investment. Disney just bought all of the Marvel and Star Wars properties? Time to buy as many stocks as possible. This kind of strategy is not only precarious, but it’s not all that smart, either.
Making regular investments is the answer to this problem. Not only are you saving yourself from poor investment decisions, but you’re also doing something known as Dollar-Cost Averaging (DCA). This allows you to purchase the same dollar amount of investment at regular intervals. The big advantage? You buy more units of an investment when the market is lower and less when it’s higher.
Working with a Financial Advisor
The importance of working alongside a financial advisor cannot be understated when it comes to protecting your investments. Not only is their knowledge of financial matters invaluable, but their ability to contextualize the “why” behind your investments is crucial. Their decisions aren’t based on emotional reactions. They utilize calculated methodology and in-depth market research instead.
Building a trust-based relationship with our clients is what we do best at Ocean Wealth. Our financial advisors have years of experience and can help you find the best way to secure your investments for the long-term. Get in touch with us to find out how we can help protect your investments.